UK-based Independent Oil and Gas (IOG) has committed to drill an appraisal well on Harvey license in the UK sector of the North Sea, following confirmation of significant prospective resources.
IOG informed on Thursday that the results of a Competent Person’s Report (CPR) on the Harvey licence by ERC Equipoise Limited (ERCE) confirmed gross mid-case unrisked prospective gas resources for the Harvey structure of 114 BCF, in line with management estimates.
Specifically, the report confirmed a minimum of 45 BCF, most likely 114 BCF, and maximum of 286 BCF gross unrisked prospective gas resources on the Harvey structure.
The CPR assessed geological chance of success at 50 percent, IOG added. Plans are underway to licence all Harvey resources.
Following the report, IOG has made a firm commitment to the UK’s Oil and Gas Authority (OGA) to drill an appraisal well on Harvey within two years.
Harvey lies directly between IOG’s Blythe and Vulcan Satellites hubs for which IOG recently submitted the Field Development Plan (FDP). Upon successful appraisal, Harvey gas could be exported via the nearby Thames Pipeline, in line with IOG’s hub strategy.
The CPR states that the Harvey structure lies up-dip of a well drilled in 1984 on the west flank of the structure that may have encountered a gas column of 30 ft in the Leman sandstone. An appraisal well is required to clarify the up-dip potential of the Harvey structure. Accordingly, IOG has committed to drilling an appraisal well on the Harvey structure by December 20, 2019. This is subject to acceptance and a license extension by the OGA, already requested by the company. IOG has already extended the Harvey license term twice over the last year, allowing itself to do more work before undertaking any further work commitments.
Subject to successful appraisal, IOG would request the OGA to determine the Harvey license area to include the full structure. IOG’s intention would then be to fast-track Harvey into development, exporting the gas via the recommissioned Thames Pipeline.
A Harvey development would be likely to have significant economic synergies with IOG’s two nearby gas hubs.
Mark Routh, CEO and Interim Chairman of IOG commented: “It is very encouraging that the prospective resources in the Harvey structure have been independently confirmed to be in line with management estimates. The down-dip well demonstrated the presence of gas in the system and the presence of good reservoir quality in the Harvey area. This makes the maximum case of recoverable gas a compelling target and in that context, we are very excited to commit to the appraisal well.
“If we proved up the most likely gross resource number, Harvey would be the largest field in our gas portfolio and its economics would be significantly value accretive for IOG.”